Question

What is the purpose of using credit ratings in the selection of reinsurers?

a.

To limit the credit risk of the whole market

b.

To determine the size and market share of reinsurers

c.

To assess the technical support services provided by reinsurers

d.

To evaluate the location and jurisdiction of reinsurers

Posted under IC85 Reinsurance Management

Answer: (a).To limit the credit risk of the whole market Explanation:Even regulators find credit ratings useful as a tool to limit the credit risk of the whole market.

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Q. What is the purpose of using credit ratings in the selection of reinsurers?
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